Basic strategy is easy. Look for buy opportunity at discount. Look for sell opportunity at premium. Carry your product to the fair-price (vpoc) region and unload it to retail. Keep a runner or two with a trailing stop for a bonus few points if it is going to come your way.

There's no particular trigger. Every trade is a 50/50 probability when you enter. It only becomes better than 50/50 when more sellers (or buyers) enter along with you. It is size and size only that moves a market. Retail is blind to this fact and trades only on price...(look its going up... look its going down). A professional trader is already long or is already short before the move. Take a look at your candlestix with a volume-by-price format attached to the candle. You'll see that most of the "action" occurred out of view of the retail candle trader that uses indicators. Indicators are lagging and are all a derivative of price. The only thing you need is a Volume Profile and a Time and Sales (formatted into a footprint style helps alot).

Take a short opportunity for example. Product inventory will display the premium level quite easily (it is called VAH in Sierra Chart). Look for both larger sell executions (bid-hits) and for DOM offers-to-sell.

This is not as hard as it sounds. You do not need indicators. You just need a basic understanding of what/how product inventory is and how it moves according to regression-mechanics (using a bell curve). Traders that do not understand this constantly get caught offsides.. and it is visible on the #'s bars. Professional traders will sell against a high-buyer at/around/above product premium, and it is how the game repeats itself, over and over. The system is fractal, so it works on all timescales, however, it works most practically from a daily VP and a footprint with DOM.

I attached a picture from an academic review I did. This is from the sim-practice, and was a review of a live trade that I took earlier in the day.

I have been trading for 15+ years, have survived my own errors, the candlestick world (which doesn't work), and hired an institutional mentor that spent over a year with me on various learning and setups. I am very serious about my trading, and this is how I make and earn an excellent living.

R
Fred

Screenshot 2023-06-08 135742

Thank you for the screenshots and explanation. My interpretation is a little different than yours and I would be very interested in hearing your thoughts. And yes, I do look at the candles as well as I think they complete the picture order flow is telling.

• Looking at the bar with the -496 Delta, my take is that price went down compared to the previous bars run into limit buy orders (Passive Buyers) and bounce. I do not see this as sellers and I think those are actually the future trapped buyers.
• The next bar with the 404 Delta, looks to me like price ran into limit sell orders (passive sellers) rather than buyers and then when it went down it hurt the -496 passive buyers who are now trapped and whose stops are getting hit starting at the -252 Delta in the next bar.

I am not seeing the larger picture in your screen-print and seeing the entire context might change my interpretation, but this would be my interpretation assuming price is trading at an area of interest. In the end, the result is the same even though our reasoning is different and perhaps this is all that matters in the end. Regardless, I would appreciate your thoughts.

Basic strategy is easy. Look for buy opportunity at discount. Look for sell opportunity at premium. Carry your product to the fair-price (vpoc) region and unload it to retail. Keep a runner or two with a trailing stop for a bonus few points if it is going to come your way.

There's no particular trigger. Every trade is a 50/50 probability when you enter. It only becomes better than 50/50 when more sellers (or buyers) enter along with you. It is size and size only that moves a market. Retail is blind to this fact and trades only on price...(look its going up... look its going down). A professional trader is already long or is already short before the move. Take a look at your candlestix with a volume-by-price format attached to the candle. You'll see that most of the "action" occurred out of view of the retail candle trader that uses indicators. Indicators are lagging and are all a derivative of price. The only thing you need is a Volume Profile and a Time and Sales (formatted into a footprint style helps alot).

Take a short opportunity for example. Product inventory will display the premium level quite easily (it is called VAH in Sierra Chart). Look for both larger sell executions (bid-hits) and for DOM offers-to-sell.

This is not as hard as it sounds. You do not need indicators. You just need a basic understanding of what/how product inventory is and how it moves according to regression-mechanics (using a bell curve). Traders that do not understand this constantly get caught offsides.. and it is visible on the #'s bars. Professional traders will sell against a high-buyer at/around/above product premium, and it is how the game repeats itself, over and over. The system is fractal, so it works on all timescales, however, it works most practically from a daily VP and a footprint with DOM.

I attached a picture from an academic review I did. This is from the sim-practice, and was a review of a live trade that I took earlier in the day.

I have been trading for 15+ years, have survived my own errors, the candlestick world (which doesn't work), and hired an institutional mentor that spent over a year with me on various learning and setups. I am very serious about my trading, and this is how I make and earn an excellent living.

R
Fred

Screenshot 2023-06-08 135742

I'm generally humbled on a fairly regular basis when it comes to trading and continue to be extremely glad I registered on FIO almost 15 years ago as I still find myself learning new things here . I've spent the past 15+ years automating "indicator soup" strategies, optimizing & narrowing the thousands of strategies tested down to a handful that work "most of the time" but only good enough to use in a semi-automated manner (hence the dashboard shown below).

Integrating machine learning into the process helped somewhat but it wasn't until I recently decided to venture back into order flow analysis that I realized that I wasted a lot of time that should have been spent digging into auction theory (and tick-level volatility & momentum analysis, which I also hope ML will assist with on the strategy front). I ported my MultiCharts EasyLanguage code over to TradeStation OOEL a couple years ago and am now attempting to add order flow into both the UI and strategy engine. The "strategy" show below is nothing more than checking for Delta/Volume > 25%; simple enough for testing purposes but obviously needs help .

I'm not 100% sure TS data is 100% up to the task (particularly bid & ask prices based on what I've read in the TS forums) so will have to compare TS data to what I'm getting from DTN/IQFeed at some point.


Your recent insights have provided a much needed validation that I've switched onto a better path - many thanks for sharing! . You appear to be using Sierra Chart - not being that familiar with that platform, how much of what is shown is built-in vs. custom/private? Are you 100% discretionary or have you ever automated any of your trading method(s) (or even think that OF can be "automated")?

Regards,
Guy

Thanks for the many traders that reached out to me for the above words and videos. I have spent my entire adult life trading (I'm 53). I've traded houses as inventory, bonds, stocks, options, futures, and even car trailers. They are ALL THE SAME.

...

Fred

Thank you for the screenshots and explanation. My interpretation is a little different than yours and I would be very interested in hearing your thoughts. And yes, I do look at the candles as well as I think they complete the picture order flow is telling.

• Looking at the bar with the -496 Delta, my take is that price went down compared to the previous bars run into limit buy orders (Passive Buyers) and bounce. I do not see this as sellers and I think those are actually the future trapped buyers.
• The next bar with the 404 Delta, looks to me like price ran into limit sell orders (passive sellers) rather than buyers and then when it went down it hurt the -496 passive buyers who are now trapped and whose stops are getting hit starting at the -252 Delta in the next bar.

I am not seeing the larger picture in your screen-print and seeing the entire context might change my interpretation, but this would be my interpretation assuming price is trading at an area of interest. In the end, the result is the same even though our reasoning is different and perhaps this is all that matters in the end. Regardless, I would appreciate your thoughts.

Thanks for the many traders that reached out to me for the above words and videos. I have spent my entire adult life trading (I'm 53). I've traded houses as inventory, bonds, stocks, options, futures, and even car trailers. They are ALL THE SAME. They follow product inventory supply/demand curves that are points of data. This data follows bell-curve regression mechanics, and buyers and sellers are clearly obvious on a DOM to those who know how to use it. Everything you do in our western capital system operates this way. Apples, cars, oil, art, pork bellies, cotton...everything. Including SP500 futures contracts. What I am showing you is the result of 35 years of various product trading. I learned to trade options on the CBOE floor with a mentor I hired. I have been professionally mentored by an institutional trader, and I quickly recognize now who is not an institutional trader and who is not. Again, thank you. This is how to read the DOM in plain english.

R
Fred

Hey there Fred. Will part 1 become available again? I see the YouTube video is private now and only part 2 shows for viewing. Thanks!